This Canadian Dividend Aristocrats guide will not only provide you with a list of stocks, but it will come with a methodology to select the right companies for your portfolio. We will also provide you with our favorite aristocrats.
The Canadian dividend aristocrats is the little brother of a much larger and world-known dividend grower list. Dividend growth investors are familiar with the popular U.S. Dividend Aristocrats List. This list of dividend growers with over 25 consecutive years of dividend increases is famous around the world. What about Canadians? Do we have companies showing 25+ years of consecutive dividend increases?
While Canada does have a few companies that achieved that feat, the Canadian dividend aristocrats list would be too short if we would include them based on the US requirement. Canadian Aristocrats are companies that have increased their dividends for 5 consecutive years.
While many investors may think this is not enough to give an elite title to a company, I tend to disagree. I love picking stocks that have just started increasing their dividends and are on their way towards a great future. This is a unique opportunity for investors to select high quality companies and still enjoy stock price appreciation going forward. We all wish we bought shares of Coca-Cola (KO) 50 years ago when it was a young dividend grower. You have a similar opportunity with the Canadian dividend aristocrats.
If you want to skip directly to the good stuff, download our Best Canadian Aristocrats Selection here:
Which Canadian stocks are included in the Dividend Aristocrats list?
As opposed to the U.S. Aristocrats, Canadian companies don’t have to show 25 years of consecutive dividend increases. In fact, even the 5 years minimum requirement isn’t as strict as we would think. Here’s the short list of requirements Canadian companies must meet to earn the Aristocrat title:
- The company’s common stock must be listed on the Toronto Stock Exchange and be a constituent of the S&P BMI Canada. Stocks listed on the TSX venture, such as Sylogist (SYZ.V), aren’t eligible.
- The company’s market capitalization (Float-adjusted) must be at least $300M. We want companies of a minimal size. Yet $300M is quite permissive.
- The increase in regular cash dividends for 5 consecutive years, but companies could pause their dividend growth policy for a maximum of 2 years within a said 5-year period. In other words; as long as the company intends to share the wealth, it has a good chance of being included among the elite dividend growers.
Canadian aristocrats Vs. U.S. aristocrats
Needless to say, it is easier to become a Canadian aristocrat than a U.S. aristocrat! To become a U.S. aristocrat, companies must:
- Be a member of the S&P 500
- Show 25+ consecutive years of dividend increases
- Meet certain minimum size & liquidity requirements
It would be foolish to think selecting any aristocrats out of the list would make a good investment. On both sides of the border, we regularly see companies getting added or withdrawn for the list. This means the list you see in 2020 is those only who survived the test of time.
This article will not only provide you with a list of promising stocks, but it will also come with a methodology to select the right companies for your portfolio.
What are the Canadian dividend Aristocrat for 2021?
The list below contains 81 Canadian Dividend Aristocrats as of early 2021. They are among the best Canadian dividend stocks. However, this list can be expected to change following the current pandemic situation. Dividends are one of the items companies tend to cut when feeling liquidity pressure. Some companies have already announced a dividend cut or suspension and will be taken off the list in 2021. We have identified companies that won’t be listed as aristocrats next year with an asterisk.
You will also find very few Technology sector companies on the list as that sector has never been known for their steady cash payments to shareholders. You will, however, find many Financial Services companies along with some Industrials. Those two sectors have been and continue to be well established dividend payers.
Companies with an asterisk next to their name will be taken off the official list in 2021 as they have either cut or suspended their dividend during the pandemic.
You can download the complete list with additional metrics such as dividend growth, dividend yield, revenue growth, P/E ratio, etc. by clicking on the following button:
| Ticker | Name | Sector |
| RY.TO | Royal Bank of Canada | Financial Services |
| TD.TO | The Toronto-Dominion Bank | Financial Services |
| CNR.TO | Canadian National Railway Co | Industrials |
| BNS.TO | Bank of Nova Scotia | Financial Services |
| ENB.TO | Enbridge Inc | Energy |
| BAM.A.TO | Brookfield Asset Management Inc | Financial Services |
| BMO.TO | Bank of Montreal | Financial Services |
| TRI.TO | Thomson Reuters Corp | Industrials |
| BCE.TO | BCE Inc | Communication Services |
| TRP.TO | TC Energy Corp | Energy |
| CM.TO | Canadian Imperial Bank of Commerce | Financial Services |
| ATD.B.TO | Alimentation Couche-Tard Inc | Consumer Defensive |
| MFC.TO | Manulife Financial Corp | Financial Services |
| FNV.TO | Franco-Nevada Corp | Basic Materials |
| CNQ.TO | Canadian Natural Resources Ltd | Energy |
| GWO.TO | Great-West Lifeco Inc | Financial Services |
| SLF.TO | Sun Life Financial Inc | Financial Services |
| T.TO | TELUS Corp | Communication Services |
| FTS.TO | Fortis Inc | Utilities |
| NA.TO | National Bank of Canada | Financial Services |
| L.TO | Loblaw Companies Ltd | Consumer Defensive |
| IFC.TO | Intact Financial Corp | Financial Services |
| MG.TO | Magna International Inc | Consumer Cyclical |
| POW.TO | Power Corporation of Canada | Financial Services |
| PPL.TO | Pembina Pipeline Corp | Energy |
| DOL.TO | Dollarama Inc | Consumer Defensive |
| WN.TO | George Weston Ltd | Consumer Defensive |
| SAP.TO | Saputo Inc | Consumer Defensive |
| MRU.TO | Metro Inc | Consumer Defensive |
| IMO.TO | Imperial Oil Ltd | Energy |
| EMA.TO | Emera Inc | Utilities |
| AQN.TO | Algonquin Power & Utilities Corp | Utilities |
| OTEX.TO | Open Text Corp | Technology |
| CCL.B.TO | CCL Industries Inc | Consumer Cyclical |
| CTC.A.TO | Canadian Tire Corp Ltd | Consumer Cyclical |
| EMP.A.TO | Empire Co Ltd | Consumer Defensive |
| CAR.UN.TO | Canadian Apartment Properties Real Estate Investment Trust | Real Estate |
| CU.TO | Canadian Utilities Ltd | Utilities |
| QBR.B.TO | Quebecor Inc | Communication Services |
| RBA.TO | Ritchie Bros Auctioneers Inc | Industrials |
| FSV.TO | FirstService Corp | Real Estate |
| TIH.TO | Toromont Industries Ltd | Industrials |
| ONEX.TO | Onex Corp | Financial Services |
| TFII.TO | TFI International Inc | Industrials |
| PKI.TO | Parkland Corp | Energy |
| IAG.TO | iA Financial Corp | Financial Services |
| RNW.TO | TransAlta Renewables Inc | Utilities |
| KEY.TO | Keyera Corp | Energy |
| BLX.TO | Boralex Inc | Utilities |
| AP.UN.TO | Allied Properties Real Estate Investment Trust | Real Estate |
| INE.TO | Innergex Renewable Energy Inc | Utilities |
| BYD.TO | Boyd Group Services Inc | Consumer Cyclical |
| CCA.TO | Cogeco Communications Inc | Communication Services |
| GRT.UN.TO | Granite Real Estate Investment Trust | Real Estate |
| FTT.TO | Finning International Inc | Industrials |
| CHP.UN.TO | Choice Properties Real Estate Investment Trust | Real Estate |
| ACO.X.TO | Atco Ltd | Utilities |
| PBH.TO | Premium Brands Holdings Corp | Consumer Defensive |
| MIC.TO | Genworth MI Canada Inc | Financial Services |
| CPX.TO | Capital Power Corp | Utilities |
| STN.TO | Stantec Inc | Industrials |
| MFI.TO | Maple Leaf Foods Inc | Consumer Defensive |
| ENGH.TO | Enghouse Systems Ltd | Technology |
| SRU.UN.TO | SmartCentres Real Estate Investment Trust | Real Estate |
| SJ.TO | Stella-Jones Inc | Basic Materials |
| OR.TO | Osisko Gold Royalties Ltd | Basic Materials |
| CWB.TO | Canadian Western Bank | Financial Services |
| CSH.UN.TO | Chartwell Retirement Residences | Real Estate |
| SMU.UN.TO | Summit Industrial Income REIT | Real Estate |
| IIP.UN.TO | InterRent Real Estate Investment Trust | Real Estate |
| TCL.A.TO | Transcontinental Inc | Industrials |
| EQB.TO | Equitable Group Inc | Financial Services |
| CRT.UN.TO | CT Real Estate Investment Trust | Real Estate |
| NWC.TO | The North West Co Inc | Consumer Defensive |
| GSY.TO | goeasy Ltd | Financial Services |
| ITP.TO | Intertape Polymer Group Inc | Consumer Cyclical |
| EIF.TO | Exchange Income Corp | Industrials |
| CGO.TO | Cogeco Inc | Communication Services |
| ARE.TO | Aecon Group Inc | Industrials |
| FSZ.TO | Fiera Capital Corp | Financial Services |
| SIS.TO | Savaria Corp | Industrials |
3 Steps to select the right aristocrats for your portfolio
As previously mentioned, going “all-in” with Canadian aristocrats may not make your portfolio any better. After downloading the Canadian dividend aristocrat lists, you can apply the following steps to ensure you pick only the best stocks possible.
#1 Focus on the sector you need
Whenever you isolate certain metrics, you will notice that certain sectors will be generally strong. This is because each sector thrives or faces tailwinds at different times. The timing of your research will determine which sector offers you the best opportunities. Unfortunately, you can’t buy all your stocks from the same sector. The DSR recession-proof workbook will guide you in this regard.
I would rather buy the best of breed for each sector than buy 4 stocks from the same industry. This will help my diversification and smooth my total returns over time. For example, the fact I had many tech stocks in my portfolio protected me to some extent from the March 2020 crash. Tech, utilities and consumer defensive stocks held the fort while my financials, industrials and consumer cyclicals were getting killed. Even more importantly, that diversification helped my portfolio bounce back relatively quickly.
#2 Start with the dividend triangle
If you have been following me for a while, you know that I’m a big fan of what I call the Dividend Triangle. This simple focus on three metrics will reduce your research time and help you target companies with more robust financials. I start all my searches with a look at companies showing strong revenue growth, earnings growth and dividend growth over the past 5 years. The detailed explanation is found in our recession-proof workbook, and I invite you to read and re-read that workbook as necessary.
First, download the Canadian dividend aristocrats list. Then, in a few simple clicks, you will set the filters and you can start hunting for the best stocks for you at that moment in time.
By selecting only companies showing positive numbers in the 5yr Rev growth, 5yr EPS growth and 5yr Div growth columns, you will find those companies with a positive dividend triangle.
This methodology covers all “regular companies”, but not REITs and other businesses that use non-conventional metrics instead of EPS. We will address those types of companies later in this letter.
#3 Priority to dividend growth, not yield
Now that you have narrowed down the number of stocks, it is time to trim that list further. Throughout the years, most of my best stock picks have been found amongst the strongest dividend growers. When you think about it, it totally makes sense. Those companies must earn increasing cash flows and show several growth vectors to be confident enough to offer a 5%+ dividend increase year after year.
Past dividend growth is a result of several good metrics at the same time. This usually means stronger revenue, consistent earnings growth, increasing cash flow and debt that is under control. We’ll dig into the other metrics later, but at first glance, a strong dividend grower will likely come with other robust metrics.
While not all my holdings show such strong dividend growth, I always search for the strongest dividend growers when selecting a new stock for my portfolio.
Using this simple 3 step methodology will narrow down your search to a few stocks per sector. It will make your final selections easier and your portfolio will likely perform better over the long run.
How to Calculate a Fair Value for Canadian Dividend Aristocrats
Valuation does play a major role in the buying process. However, this should not be the single factor that determines whether you buy or not. This is one factor among many. To be honest, I would rather buy an “overvalued stock” with a strong dividend triangle, great growth vectors and lots of potential for the next 10 years than buying an “undervalued stock” that has nothing else but a good yield and a poor valuation.
When I find a company I really like, but the valuation seems ridiculous, I’ll be tempted to put it on a watch list and wait for a while. I usually build this watch list on the side and when I’m done with one of my current holdings (e.g. the company doesn’t meet my investment thesis anymore), I pull out the watch list and check to see if valuations have changed. Once again, I’ll pick any “Alimentation Couche-Tard” (overvalued, strong growth) over any “Suncor” (undervalued, modest growth) of this world.
PE Ratio
At DSR, we use mostly two methodologies to determine a stock’s valuation. The first one is to consider the past 10 years of price-earnings (PE) ratios. This will tell you how the stock is valued by the market over a full economic cycle. You can then determine if the company shares enjoyed a PE expansion (price grows faster than earnings) or if the company follows a similar multiple year after year.
Dividend Discount Model
When you look at stocks offering a yield of over 3% with a stable business model, the dividend discount model (DDM) could be of great use. Keep in mind the DDM gives you the value of a stock based solely on the company’s ability to pay (and grow) dividends. Therefore, you will find strange valuations when you look at fast-growing companies with low yields (e.g. Alimentation Couche-Tard!). Find out more about the DDM model and its limitations here.
While the idea of receiving dividends each month is seducing, this is not what makes dividend growth investing magic. It’s the combination of capital growth and dividend growth (read total return) that truly generates the magic in your portfolio. You can download the complete list with additional metrics such as P/E ratio, dividend growth, dividend yield, revenue growth, etc. by clicking on the following button.
Best Canadian Dividend Aristocrats for 2020
Searching through almost 100 stocks could become tiresome. Using the Dividend Stocks Rock investing methodology, I’ve selected my favorite Canadian Dividend Aristocrats. You can download a complete eBook on our best Canadian Aristocrats here.
Alimentation Couche-Tard (ATD.B.TO)
Business Outlook
Alimentation Couche-Tard operates an extensive network of convenience stores across the world. North America, Ireland, Scandinavia, Poland, Russia and even the Baltics are the homes to their operations. Revenue sources are divided into 3 major categories: merchandise and services, road transportation fuel, and others. In the last 2 decades, management has been focusing on growing the company via acquisitions. This has been a successful strategy as evidenced by their stock growing from $2.40/share in 2009 to their peak of $46.10 in early 2020.
ATD.B.TO shows an annualized dividend of $0.28/share which equates to a yield of around 0.60%. This is obviously not the juiciest yield around, but the resilience of their business model, especially with the current pandemic, has proved to be a winner. Now in its 12th year of annual dividend increases (split-adjusted), the company has proven that their business is capable of significant growth and value enhancement.
Potential Risks
The management has proven themselves to be quite adept at using acquisitions to grow their business, but inherently that method of growth has a healthy dose of risk associated with it. Non-organic growth presents its own share of risks when it comes to identifying the right targets, the integration of the companies, and the synergies realization. With fuel consumption forecasts being lowered globally, ATD.B.TO may face some challenges down the road when it comes to demand for their core products.
Canadian National Railway (CNR.TO)
Business Outlook
What would the Canadian economy be without an extensive railroad network? CNR.TO built a coast to coast railway that delivered over 6M carloads last year over their 19,600 miles of track. Revenues are spread across several segments. Most notably intermodal containers, petroleum and chemicals, grain and fertilizers, and forest products. As the Canadian economy expanded and diversified, CNR.TO always has been a key player to move products across the vast territory of the Canadian nation. The stock price had soared to a high of $127.79 in early 2020, which represents a 224% gain since 2012.
CNR.TO yields slightly under 2% with its annual dividend of $2.30. The fundamentals of this business are strong, and that should present the opportunity for further dividend increases in the future. Over the last five years the dividend was increased by 16.54%. Strong dividend growth should continue over the next five years and beyond.
Potential Risks
CNR.TO’s operations are fraught with risks. Railways confront harsh weather, ongoing maintenance costs, and management of both physical and personnel assets. Management also has the challenge of responding to the organic growth of Canada’s overall economy. Key segments of the Canadian economy like forest products, oil and grains should be closely monitored as rail is often the primary way for those products to be brought to market.
Fortis (FTS.TO)
Business Outlook
Fortis operates utility transmission and distribution assets across Canada and the United States. The company has a customer base of around 2.5M, which is split between gas and electricity consumers. The company holds smaller stakes in electricity generation and Caribbean utilities, which helps FTS.TO to generate 66% of its earnings outside of Canada. They also hold 16,000 miles of high-voltage transmission lines that power their distribution network.
FTS.TO shows a yield slightly above 3.50%, which is on the low side compared to its utility peers. Low yield aside, the company has invested massively in its operations, and has proven itself to be a solid bet for future growth. Management has deployed a 5-year investment plan with the goal being growing, sustainable, and quality dividends.
Potential Risks
Utility companies typically show low to mid single digit growth over time. FTS.TO also recently acquired 2 businesses in the U.S. in pursuit of additional growth. Taking on operations south of the US/Canadian border may quickly become a money pit as economies of scale may or may not be realized. Development in “foreign” markets should be undertaken with care as they may also face added competition and margin pressure.
Royal Bank of Canada (RY.TO)
Business Outlook
The largest bank in Canada, RY.TO, provides financial services to individuals, commercial and institutional clients. Their commercial banking segment makes up 50% of the bank’s revenue which makes it a powerhouse amongst the Big 5 Canadian banks. Although most of its operations are concentrated in Canada, they also expanded into the US in 2015 by acquiring City National Bank whose focus was on wealth management operations with their high net worth clients.
Canada’s largest bank pays an annual dividend of $4.20/share which translates into a current yield near 4.50%. The company has increased its dividend twice per year for the last couple of years. This additional dividend growth was at least partially funded by their impressive growth in insurance, wealth management and the capital markets sectors.
Potential Risks
Capital markets are often the main risk for a bank where the impact of mistakes can be felt across all the bank’s operations. RY.TO has an accentuated exposure to the housing market, and a pandemic caused recession where people are struggling to pay their bills might put significant pressure on their margins.
Telus (T.TO)
Business Outlook
In the communications industry, we have Telus, which enjoys a nearly 30% market share in its industry. Their 9M subscribers are offered television services, landline phones, and internet. The company has configured many homes with fiber on its wireline footprint. T.TO also presents interesting and growing profits in its wireless segment, which has grown dramatically since 2010.
T.TO pays a quarterly dividend of $0.29125 leading to an annual yield of nearly 5%. The company was able to generate an 8.18% dividend increase over the past 5 years and is well-positioned to make significant strides in profitability with their new 5G network.
Potential Risks
T.TO is one of the Big 3 communications companies in Canada. The only problem with that is that even the Federal Government wants to see more competition in this industry. They could face more competition in the future which could potentially lower their prices on existing products and services and degrade their margins.
Open Text Corporation (OTEX.TO)
Business Outlook
Open Text has created a specialized business in the technology sector. Managing, integrating, and classifying raw data, as part of an Enterprise Information Management (EIM) system is the core business of OTEX.TO. The company has secured many large customers for their services including Governments, multinational corporations, and various institutions. Since the company’s inception in 1991, management has focused on growth by acquisition, and they have successfully completed a dozen acquisitions to attain their current level of operations.
OTEX.TO started paying dividends in 2013, which is unusual for a technology company that typically focuses on growth. Paying out an annual $0.6984/share dividend yields just under the 5% mark. They are now in their 6th year of increasing dividends, and the company has added the necessary expertise in its operations to sustain payout growth for years to come.
Potential Risks
Remember that OTEX.TO operates in the tech sector, and that means the company faces many of the giants we all know about. It is a fast-paced environment that requires quick responses to opportunities and outstanding operating flexibility. Acquiring companies is a good way to grow your business volume, but it also brings its own share of risks.
Falling Canadian Aristocrats
The pandemic outbreak early in 2020 brought a lot of volatility and uncertainty to both businesses and their employees. With multiple companies closing at least temporarily, many companies tried to make a digital turnaround to cope with the “new reality”, and of course, many other companies simply couldn’t afford to close temporarily or restructure their operations, and they simply had to close permanently.
Those who felt excessive pressure and tried to preserve liquidity by cutting their dividends might be pushed off the precious Aristocrats list. Cutting the dividend doesn’t automatically exclude the aristocrat from the list. The company still has until the end of the year to reinstate its distribution and possibly add to their dividend to make the list. We think that is unlikely to happen with any of the below companies.
Here are some of the companies that face a tough situation:
| Company | Sector | Situation |
| CAE Inc | Industrials | – 10.5k employees laid off
– Dividend and share repurchase suspended – Salary Freezes |
| Gildan Activewear Inc | Consumer Cyclical | -Recorded a $100M loss in Q1
-Quarterly dividend suspended -Seniors and Execs halved their salaries |
| Inter Pipeline Ltd | Energy | -Revenue down 8.4% at Q1 YoY
-72% dividend cut in Q1 -Directors cutting their salaries |
| Laurentian Bank | Financial Services | -Profit fell 79%, PCL soaring
-Dividend cut by 40% -First dividend cut by a Canadian Bank since 1992 |
| Methanex Corp | Basic Materials | -Demand declined 7%, historically low prices
-Dividend cut by 90% |
| New Flyer Industries Inc | Consumer Cyclical | -Idling plants, 300 lay offs
-Dividend cut in half -Expansion plans shelved |
| Richelieu Hardware Ltd | Consumer Cyclical | -No dividend declared in Q1
-Significant ST debt, total debt up 105% from Q4 2019. |
| Sleep Country Canada Holdings Inc | Consumer Cyclical | -Net income down 36%
-Dividends and share repurchase suspended -Expansion and capital spending halted |
| Suncor Energy Inc | Energy | -Low commodity prices, operating loss of $309M
-55% dividend cut -Revised capital spending down twice in Q1 |
The impact of COVID-19 on Canadian dividend aristocrats
As you may have noticed, the predominant sector affected by the pandemic is Consumer Cyclical. These non-essential businesses face a huge reduction in demand for their products and services, and their profitability has been and will continue to be impacted substantially.
The other important sector of the TSX that was affected by this pandemic induced recession is the energy industry. Since most companies involved in this sector rely on the volatile price of oil and gas commodities, they usually are challenged to grow their dividend. For this reason, you won’t find many of them on the Canadian dividend aristocrats list.
Obviously, the repercussions of a pandemic induced recession are hard to quantify and even harder to predict given our lack of experience with this type of recession. Businesses now face an unknown threat which puts their operational flexibility to the test. More stocks may be bumped off the Aristocrats list by the end of 2020 as the financial impacts evolve over the coming months.
I know how hard it is to invest when stocks don’t seem to trade at their fair value
Don’t you hate not knowing when to buy or sell stocks? There are too many investing articles contradicting one another. This creates confusion and leaves you with the impression you may not reach financial independence. It doesn’t have to be this way. We have created a free, recession-proof portfolio workbook which will give you the actionable tools you need to invest with confidence and reach financial freedom.
This workbook is a guide to help you achieve three things:
Invest with conviction and address directly your buy/sell questions.
Build and manage your portfolio through difficult times.
Enjoy your retirement.
Disclaimer: I hold shares of ATD.B, FTS, T, RY, OTEX, CNR.
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